State-owned oil refiner Indian Oil Corporation (IOC) has received its board's approval for setting up a new refinery in Nagapattinam in Tamil Nadu at an estimated cost of Rs 29,361 crore. The plant will be established by IOC's subsidiary, Chennai Petroleum Corporation Limited (CPCL), to meet the demand of petroleum products in southern India. The new refinery will have an annual refining capacity of 9 million metric tonnes.
The board has also given permission for formation of a joint venture between IOC and CPCL, where each will hold 25 per cent stake in the new plant while the balance will be owned by other investors, subject to regulatory approval.
"The board of Indian Oil at its meeting held on January 29, 2021, has accorded approval for implementation of 9 MMTPA refinery at Cauvery Basin, Nagapattinam in Tamil Nadu by Indian Oil's subsidiary company, Chennai Petroleum Corporation Limited (CPCL) at an estimated cost of Rs 29,361 crore, to meet the demand of petroleum products in southern India," the state-owned oil marketing company said in a filing to the Bombay Stock Exchange on Friday.
"The board has also accorded in-principle approval for formation of a joint venture between IOC and CPCL with equity holding of 50 per cent (i.e. 25 per cent each in the Joint Venture) and balance to be held by financial / strategic / public investors to be identified later, for implementation of the project, subject to approval of NITI Aayog and other statutory approvals," it added.
According to IOC Chairman and Managing Director SM Vaidya, the plant will be completed within 48 months from the dates of investment approval and statutory clearances. The refinery is expected to source 80 per cent of materials and services indigenously, he said, adding that it will produce diesel and petrol meeting Bharat Stage VI standards.
The board of directors, in its meeting on Friday, also approved an interim dividend of Rs 7.50 per equity share, while approving financial results for the December quarter of 2020. For October-December quarter, IOC reported 62.41 per cent rise in consolidated net profit at Rs 4,359.11 crore, from Rs 2,683.87 crore reported in the corresponding period a year ago. Its revenue from operations rose marginally by 0.57 per cent to Rs 1,47,810.23 crore, compared with Rs 1,46,967.12 crore in the same period last year.